Not Child’s Play: CBP Forms 28 & 29

John Goodrich | October 11, 2009 | Import Basics
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If you are an importer and you notice that Customs and Border Protection (CBP) is counting to 28 and then 29, it is not a signal to quickly run and hide. Instead it is time to make yourself visible and to make yourself heard. When CBP uses the numbers 28 and 29 they are referring to two official forms. As a former importer these were some of my least favorite communications with Customs. While I had nothing to hide from the authorities, the scrutiny caused additional work for me and my team and a certain amount of anxiety as well.

…28, 29, 30! Ready or not here I come!
 
Headless_guy_filing_out_a_form_on_desk
And so begins many a childhood game of hide-and-seek or kick-the-can.
 
If you are an importer, however, and you notice that Customs and Border Protection (CBP) is counting to 28 and then 29, it is not a signal to quickly run and hide. Instead it is time to make yourself visible and to make yourself heard. When CBP uses the numbers 28 and 29 they are referring to two official forms:
  • CBP Form 28 - Request for Information
  • CBP Form 29 - Notice of Action
As a former importer, these were some of my least favorite communications with Customs. While I had nothing to hide from the authorities, the scrutiny caused additional work for me and my team and a certain amount of anxiety as well.
 
 
The form is self-explanatory. The import specialists in the local CBP ports routinely use this form for soliciting additional information about a shipment after it has been allowed entry into the US. The additional information is used to verify if the goods were properly classified, valued or otherwise met US import regulations. The CBP Form 28 can also be used to request a sample for evaluation.
 
This all seems harmless enough, especially for the compliant importer. But let us be clear. A CBP Form 28 is serious business and should be given top priority!
 
The importer receiving the form has 30 days from its issuance to respond. Unfortunately these forms are normally sent via US mail. After languishing in the import specialist’s outbox for a day and then meandering through the catacombs of the US Postal Service, the form finally arrives at your company’s mailroom. It usually will not be addressed to the import office, so it might wander about your company for awhile until someone finally recognizes that it is important. Two weeks later it lands in your inbox while you are on vacation. By the time you finally get the form you have six days to respond. Now what are you supposed to do?
 

Best Practices

Because each instance of a CBP Form 28 is unique, it is difficult to instruct you on how to respond appropriately. Following are best practices companies use to ensure proper handling of a CBP request for information:
  1. Don’t panic! While a CBP Form 28 could indicate control weaknesses within your import program, it could simply be a routine inquiry. Respond promptly and professionally.

  2. If you cannot respond within the 30 day time limit, call the CBP officer that issued the request. Ask for an extension. Document that conversation and respond in writing to Customs confirming any verbal extension that may have been granted to you.

  3. Read the entire CBP Form 28 and ensure you are responding to all of the questions it is asking. Questions may be embedded within fields 12, 13 and 14 of the form. Pay particular attention to language that would indicate that the request is part of a “formal investigation” of the importer. This is a clear indication that the request is beyond routine.

  4. Even if you can meet the 30-day deadline, call CBP and talk to them about what might have triggered the inquiry. It could be something simple like an inadequate product description or an unclear pricing notation on the commercial invoice. This will help you provide a more helpful response. In one instance an importer discovered that the inexperienced import specialist did not fully understand the details of a special duty program. After diplomatically sharing the regulations with him he was satisfied that the goods were indeed in compliance.

  5. Ask yourself what might have triggered the inquiry. Were value, class and country of origin properly recorded on the entry? Is the claim for the free trade agreement accurate? Have similar transactions been subject to CBP scrutiny in the past? Are commercial documents complete and accurate? Did the vendor provide inaccurate information? By anticipating the concerns you can begin to raise arguments and provide information the specialist otherwise may not have considered.

  6. The CBP Form 28 may lead you to discover a material weakness within your import program that will require you to disclose and tender unpaid duties. Seek and follow the advice of your Customs Broker and/or Legal Counsel.

  7. When responding to CBP it is common to attach additional documents to the CBP Form 28. When doing so take care to reference this information in field 15 of the form. Should the documents become separated this will indicate to CBP that you made a complete response.

  8. Be direct and concise when responding. Avoid providing excessive information that has nothing to do with the inquiry, the specific products or entry in question.

  9. Notify executive management of inquiries from Customs. While management may not need to be directly involved in responding to each CBP Form 28, they and you have a fiduciary responsibility to protect the company. While an occasional inquiry from Customs is routine, excessive inquires are not and could represent a serious risk to the company’s importing privileges.

  10. Authorize knowledgeable employees within the company to respond to the CBP Form 28. Ensure there is redundancy in your program so that more than one person is aware of the inquiry and is capable of responding.

  11. Provide training for the mailroom and other staff to ensure they can recognize communication from CBP and are aware of the need to urgently route the form to the appropriate import authorities in the company.

  12. As part of your import compliance program, ensure your policies and procedures include standards for responding to a CBP Form 28. Those standards might include some of the suggestions listed above.

Failure is Not an Option!

Do not ignore a CBP Form 28. If you fail to respond to the request, CBP could revalue your shipment, reclassify your good, or overturn your free trade agreement claim. All of these will result in assessment of additional duties. Failure to respond to CBP could also result in entry liquidation being suspended and referral to a special agent in charge for further investigation and enforcement action. Failure to cooperate with CBP could be viewed negatively within a focused assessment of quick response audit.
 
Frequently the CBP Form 28 results in no action from CBP. The import specialist determines that the shipment was accurately entered and no additional duties or fees are owed. Sometimes, however, the import specialist disagrees with the original entered value, classification or special duty claim. At that point the specialist issues a CBP Form 29 or notice of action notifying the importer that the entry will be liquidated and assessed additional duties.
 
 
The notice of action has two primary uses. It can be used as noted above to communicate that CBP has assessed additional duties and begun the liquidation process. It can also be used to notify an importer that CBP is proposing to assess additional duties.
 
Proposed notices of action are frequently issued when there was no need to request additional information using a CBP Form 28. The import specialist believes there is sufficient information within the original entry with which to make a decision.
 
When the CBP Form 29 is merely a proposed action, the importer has 20 days to respond to it. The 20 days begin as of the date of the issuance of the notice. It therefore becomes even more critical that an importer develop a process for ensuring communications from CBP are routed directly to the import compliance staff.
 
If an importer fails to respond to CBP within the 20 day time period, Customs will assume the importer is in agreement with the proposed action and will assess the additional duties and begin the liquidation of the entry.
 
I recently observed a CBP Form 29 that proposed to assess antidumping duties on an importer based upon the country of origin listed within the entry. Upon receipt of the CBP Form 29, the importer quickly checked its records and discovered that the customs broker had typed the incorrect country of origin. The importer shared the appropriate documents with CBP, the broker admitted the typographical error, and Customs quickly rescinded the CBP Form 29.
 
When the CBP Form 29 states that action has been taken, the decision is final. The entry has begun the liquidation process. The primary recourse remaining to the importer is to await the liquidation notice and to file a formal protest and ultimately to pursue relief through the court of international trade.
 
Let us also remember that while CBP Forms 28 and 29 may be routine measures, almost all civil fine, penalty and forfeiture (FP&F) proceedings are preceded by these two documents. It is not uncommon, therefore, that a CBP Form 29 will be followed by a pre-penalty notice for negligence, gross negligence or fraud.
 
“Olly Olly Oxen Free!” yell the kids in their game of kick-the-can. This statement, an Americanized version of the German “Alle Alle auch sind frei!” literally means "All, all, are also free!"
 
And so it can be with the information requests from Customs. If importers would but respond in a timely fashion to the original CBP Form 28, they just might be able to get to home base free of additional duties and penalties. Then again, just like in the child’s game, some of the players get caught along the way.
 
Many thanks  to Kathy Odham of Lockheed Martin Corporation who suggested this article and provided advice along the way.
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